Markets are efficient?

Matt D. afn02065 at
Wed Jul 12 10:53:14 MDT 1995

Rob writes:

>Counting and organizing economic information via computer will not make
>state planned economies compete. Values are ultimately expressed in prices
>purchasers are willing to pay for economic goods. Bureaucrats can try to
>assign prices, but without a sizable market sector, distorted information
>will abound and poor economic decisions will  be made.

I am not an economist, so perhaps this question only reveals my ignorance...
but what is so efficient about the "market sector"?  It seems to me that in
the market sector--by definition--distorted information abounds and poor
economic decisions are made.  Something like 50% of new enterprises fold
within their first year or two, right?  This is the "anarchy of capitalist
production" is it not?

To put it another way, suppose you're trying to hit a target that is the
"efficient" method of producing something.  You could take a catapult loaded
with a bunch of pebbles and hurl it, and likely some of the pebbles will hit
the target.  Most will miss.

Or you could get one of those fancy wire-guided anti-tank thigamajigs and
smack it with one of those babies.  Your chances not only of hitting the
target, but doing it with little "wastage" would be greatly increased.

Paul Cockshott and A. Cottrell (?) had/have an article available in the
archives about the application of computer technology to planned economies
that paints a pretty optimistic (and to my non-specialist mind, correct)
picture of the prospects in this area.

Any thoughts?

-- Matt D.

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